David Morgan – The Silver Value Proposition

David Morgan of the Morgan Report sits down with Maurice Jackson of Proven and Probable to provide an in-depth analysis on the value proposition of silver. Topics that will be discussed in the interview include Supply, Demand, Recycle, Money vs Currency, the definition of a dollar, the FED, Bureau of Engraving and Printing, Commodities Mercantile Exchange, Spot Price, derivatives, SLV, U.S. Debt Clock, and most important what actions you the investor need to take.

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Maurice: Welcome to Proven & Probable where we focus on Metals, Mining and More. I’m your host, Maurice Jackson. Joining us for a conversation is arguably the most respected name in Silver. He is the author of The Silver Manifesto and the founder of The Morgan Report. Mr. David Morgan, thank you for joining us, sir.

David: Maurice, thank you so much.

Maurice: David, I’ve received a number of inquiries from subscribers requesting your perspective on the value proposition before us in silver. Before we begin, I’d like to lay a foundation on why stewardship in precious metals in particular silver is vital to one’s portfolio. Allow me to begin by saying what money is and what a dollar is. So money per the Constitution, Article 1, Section 10, is physical gold, physical silver. And the definition of a Dollar can be found in the 1792 Coinage Act which is 371.25 grains of silver.

Now, David, my banker, my stock broker, I get this pension fund report, the world of academia and the mainstream financial news programs on TV and the radio, they all say that I have money in the accounts I just referenced or dollars. Why is it so critical for investors to understand that they do not have money but rather currency in these accounts?

David: Well, it’s not only a legal issue but it’s an understanding of what happens throughout history with a fiat-based system where something is substituted for the reality. So let me explain that a bit better. The constitutional definition has not gone away. The 1792 Coinage Act has not gone away and there’s actually been core cases regarding the term “dollar” and it’s very arguably accurate to state that a Federal Reserve note is not a dollar. So, that at law has been upheld. The issue then becomes what does that mean and, of course, the meaning is that the government had passed a “legal tender act” which means that this thing that’s unbacked by anything is valid for payment of taxes and, therefore, they consider it to be valid as a means of exchange. But, real money has a value in and of itself. Gold and silver fill that requirement.

So, you know, if we want to go down the rabbit hole any further, we can but I think what we need to understand is that all fiat systems have always failed and right now the 1913 Federal Reserve Act was one that was implemented. Whether legally or not, that’s another discussion we won’t go into. But regardless, the whole idea is that this private banking consortium could dictate what “money” is and the federal government was able to borrow from a private group and issue it with their name on it. In other words, it’s issued as a US “currency” which starts the big mess because if you look at what they—the Federal Reserve—says, they’ll tell you that the 1913 dollar is worth about 3 cents, so we failed miserably. Their mandate was to stabilize the monetary system. It wasn’t too long after we implemented that we had the great depression. It’s called great depression for a reason and that was under their mandate and yet showed that their ability to control the monetary stability failed completely.

Back in the beginning, gold and silver were backing the currency. No longer it’s been that way for quite some time. And so we’re in this mess and we’re looking at how much further do we have to fail before the market at large recognizes it. That doesn’t mean you need 90% of the people to understand what you and I are talking about. You probably only need another 1% of the population to understand what’s really going on before you will have a failure. It’s on a math projector. In other words, it’s not a political issue anymore. It’s a math problem and the math problem is that you have to default. So you need to default by stating you cannot pay back this debt and take a markdown on what the value of the US debt markets are. That is the short intermediate long bond, or you fail the way most governments do which is you just keep debasing the currency until it isn’t accepted anymore.

Maurice: And I just want to reemphasize it. The reason I’m making this point here is that words create emotions and you are never judged by your intentions. You are judged by your results and we want you to have the right results. And just to further digress you just slightly, you know, when you look at a Federal Reserve note, David, there’s two languages on there. There’s English and Latin, but what’s the one word that’s missing on there?

David: You and I both know. The word “money” does not exist.

Maurice: You know, for our listeners, if you’re having a challenge with these remarks regarding money, just be clear here. Let’s be clear, I should say, that we’re giving you factual empirical evidence and I will post along with this interview a video sharing a discussion I had with the Bureau of Engraving and Printing and the Federal Reserve where I provide you with their phone numbers respectively and you can call for yourself and ask why the word “money” is not printed on a Federal Reserve note. Now that we’re doing some housecleaning, let’s get to the value proposition before us in silver. Let’s break down for listeners here the supply fundamentals.

David: Excellent. Well, the supply of silver ebbs and flows. We have gone from all the silver has ever been mined in history to basically an availability of investment-grade silver. I’m not talking silverware or silver jewelry of about 2 billion ounces of fine silver. And on the gold side, we’re at probably 5 billion ounces. So, there’s actually more investment-grade gold than there is investment grade silver.

Maurice: Interesting. Now sticking with the supply thesis here, you have primary silver producers and then we have base metal mines. Discuss that for us.

David: Well, the silver mining, first of all, there’s this idea and a valid one that, you know, silver is always in a deficit and that’s really not true. From 1990 to 2006, we were in a deficit. The above-ground supply in 1990 was roughly 2 billion ounces. Supply and demand have to meet every year, so what happened was the above-ground supply was eaten away for about 15 years straight and the above-ground supply got down to about 500 million ounces. Early in the 2000s started the big boom in the commodity sector particularly run by the Chinese because they are building new infrastructure at a huge rapid rate in its, you know, 1.2 billion population. So they had this huge demand across the board for commodities, silver being one of them and base metals as well. So, we started actually to build inventories because the production or the amount of silver that was being mined increased substantially from roughly 2003 to present day.

And so now we’ve built the supplies back up to 2.2 billion ounces, but don’t let that dissuade you from being a silver investor because most of the excess silver that isn’t used in the industry is held by long-term investors that are looking at it for monetary protection, safe haven status or pure and simply money.

Maurice: Which puts us in that category for the most part. Now, in reference to—back to mining just briefly here. Does most of the silver come from primary silver producers or base metal mines?

David: It is base metal mines about roughly 70% of all silver mined globally as a result of copper mining, zinc, and lead mining and actually gold mining produces about 13% of the silver supply. So, primary silver producer is about 25% of the total supply and there really is no such thing as a pure silver producer. So, when you look at a silver mining company such as Pan American Silver or Tahoe Resources or—I’m not talking about streaming company like Silver Wheaton but like a mine— Coeur D’Alene, Hecla, you name them. They’re all gold-silver mines, gold-copper mines, gold-lead-zinc mines—excuse me—silver-lead-zinc, silver-whatever. So, it’s a combination now. If you look at AG, First Majestic, they have the highest ratio of silver to base metals of any mining concerned out there. They’ve dropped off somewhat, but they’re still the most leveraged to silver, but there’s no such thing anymore as just a mining concern that mine silver, pure and simple. That doesn’t exist.

Maurice: Interesting. And at The Morgan Report, I know that you’re always keeping up-to-date with the all-in-sustaining cost. Can you share with us what those numbers are?

David: Yes, they vary because most mines particularly open-pit are—an open-pit mine is basically a dirt-moving operation. I mean in a gold situation, you might have as low as 1 gram per ton, which if you look at what a gram is and you know what a ton of dirt looks like, you’ve got to move a lot of earth to get out one little gram and that’s a barely profitable mine. The only reason like the big Newmont, etc., can do is they have it down to a fine science/art and they’re able to eke out a profit at those very low grades.

But, mining is a very tough business and so the—like in the oil sector, the easy to get to high-grade situations where there’s huge margins meaning large profitability, those are pretty much gone by the wayside. Are there some out there? Yes, there are. In fact, I’m pretty high on an exploration company that we just put on the list at The Morgan Report, but they’re few and far between. So that means that you just have to pay more and the energy input to get an ounce output is a very, very important fact that you must be cognizant of.

So, if oil goes back to let’s say $150 a barrel, then some of these mines are economic when oils at, you know, $50 or so will not be economical in those conditions. And right now, the all-in-sustaining cost ballpark figured varies is mine to mine and some people figured differently than we do at The Morgan Report because they don’t put in the tax consequences. But you’re looking at about 17 or so. And that means most of these mines that are highly efficient have gotten rid of all the fat or lean and mean and doing the best they possibly can are not making much of a margin on producing silver right now.

Maurice: Interesting. So we’re right at spot in essence.

David: Pretty close, yeah. For all practical purposes, correct.

Maurice: All right now, how about recycling? How does that fit into this discussion?

David: Bigger than most people realize. I mean there’s this big idea that people may be misconstrued that, you know, silver always ends up in a landfill and, you know, it’s used up. And to a large extent, that’s true but the facts are that there’s roughly between 160 and 180 million ounces of fine silver recycled every year. And it used to be almost exclusively from photographic waste, but that’s changed with the advent of the digital camera.

However, the e-waste has picked up substantially meaning electronic waste. For example, mistaken—well, not mistakenly at the time, I used to talk about in the late 1990s, early 2000s that it wouldn’t be worth, you know, melting down a cellphone to get the silver out of it because it would be uneconomic. In those days, we really didn’t have smartphones. But after the smartphones came to the fore and that’s been the case for many years now, there’s actually about 4 grams of gold per ton in smartphones. So you actually have a better mining operation mining tons of smartphones in some of these marginal mines that I just outlined like 1 gram per ton as a bag—a ton of cellphones, for example, or smartphones, I have to quality it, would produce more gold per ton than some of the ongoing operations in the gold industry right now.

Maurice: You know, it’s ironic you mentioned that. At one point in time if I’m not mistaken, one ounce of silver could create 536 iPhones. I don’t know if that number has changed. I believe that came from the silver institute. This is probably 2012, but I don’t know if you even keep up with that number at all, but I just thought that was an interesting little factoid there.

David: No, it’s true. And it’s the gold that they’re after. I mean if it wasn’t gold in a smartphone, then it probably feeds all in the landfill. But when you’re going to crush them, remove the plastic, get down to the, you know, bare minimum in this crushed e-waste or we call electronic waste, then you do the process to recover the gold out of it. You’re going to recover as much of the other metals as you possibly can. Again, it’s an economics problem. It’s a metallurgist that gets in there and it depends on how what’s called the circuit is designed. I don’t want to get too far on the minutiae, but these things are important if you’re going to produce a profit.

So, in some cases, they might tweak the circuit to, you know, recover 90% or more of the gold and let some of the other elements go to the wayside because they’re not as valuable. But cellphones have a lot of very interesting rare earth metals in them as well and they’re on a very small scale, but again when you start to harvest them by the ton. They can be substantial returns to someone that’s in that business.

Maurice: And coincidentally, this is also one of the reasons why you see now when you purchase a new smartphone, they want to have your old smartphone.

David: That’s right.

Maurice: All right. Before we leave supply, fact or fiction, the United States has strategic stock piles of silver.

David: They do not and it’s interesting because at one time they did, and it was prior to 1986 when the Liberty—Silver Liberty Act was passed which means that the Silver Eagles, however one refers to the coin, but the US Mint, basically the legislators, decided that the strategic stockpile of silver was no longer necessary and, look, there’s all the silver laying around and let’s pass this Coinage Act and start minting silver and gold coins, which they did. When it was first passed, what was interesting is the statement at law was—it was required to use nothing but domestic silver for the silver liberty, yet they took up more silver than was available domestically. So then they had to go in and change the law and say, “Well, we could take silver basically from anywhere in the planet to produce a silver liberty.”

So, that was, you know, for us that are nerds about silver market is kind of an interesting fact because it shows you that the actual annual supply of what’s domestically mining in the United States of America is insufficient just for coin demand and coin demand is around 40 million ounces now, but that’s a pretty small number, and the US can’t even meet that based on their own mining efforts.

Maurice: Well, you know, the silver nerd in me has this little nuisanced to complaint, if you will, in reference to Silver Eagles, you know. It states on there $1 but again that is not $1. That is actually more in grains of silver. I believe it’s 435 grains of silver versus 371.25. I was always curious why when they created the Coinage Act, they didn’t stick with the integrity of what a Morgan and Peace dollar was, but I digress. Shifting to demand, what can you share with us with regards to demand on silver?

David: Well, the industrial demand is pretty much priced in elastic, which means that no matter how high the price of silver is, there is no substitute in the user, the producer of whatever the commodity is or the product is that’s usually the mobile phone or smartphone again, really doesn’t care that much. If you’ve got, you know, 25 cents of silver in an iPhone and—or you could do the math. It was 576 anyway, whatever, it is a couple bucks. If the iPhone sells for $400 or $500, if silver goes up tenfold, your still going to use silver and it really isn’t going to prohibit the cost in the cellphone or in the smartphone. It will increase it slightly and, of course, what these companies have done in the past is, you know, make a big deal out of it and pass on the cost to customer anyway, but in reality the silver component of the overall product is a miniscule amount relative to the cost of everything else, and this is the case for a refrigerator or a microwave oven or a DVD player or a flat-screen TV or any of these electronic goodies that we’re all addicted to, speaking for myself.

But, these end-products of electronics all use silver, all require—it’s essential for their performance and there’s no way out of it and they all cut back to the minimum amount required. In other words, there isn’t such thing as we’ve got twice as much silver in our flat-screen than this one because you get, you know, twice as good a picture. That doesn’t exist. So, they’re all basically squeezed down to the absolute essential need of silver to the absolute lowest amount that’s required. So there isn’t a lot to play with, so it’s priced in elastic on the industrial side for the most part. It depends on what the demands are for all the electronic goodies I just outlined, the medical uses and all the new ones that come to fruition every year. I mean there’s more patents put on the silver market for new uses and any other commodity with the exception of oil. There’s more in the oil industry. By the way, I have to mention, zinc also has a lot of uses and there’s a lot of new uses dreamt up for zinc every year. But silver by and large—by far actually, more than zinc, has new uses.

So, that is part of the supply. The other part is the recycling that we already talked about and lastly, you know, whatever remains is, you know, pretty much gobbled up by investors both, you know, retail investors and institutional investors.

Maurice: Now, based on the research conducted by The Morgan Report, do you foresee the demand growing or decreasing?

David: Momentarily, I see it stagnant. I think that we’re in a saturated market. I think that everyone has heard the gold and silver story that’s been an advocate of, you know, honest money or more on this financial system. That may be one motive. Another motive might just be the inflation scare or currency crisis ahead. Another might be just pure safe haven. Another one might just be tradition, you know, to use Bernanke’s word.

Maurice: I recall that, yes.

David: It’s tradition in India to own silver in bracelet form, which is money to them, and some of the ancient countries. So, there is tradition. It’s also a monetary tradition but, nonetheless, it exists. So all of those offtakes of the silver market I think at this point in time have been saturated because most of the investment silver goes to North America and so the Canadians and the US people for the most part are the ones that buy most of the coins. I mean there is—there are silver investors worldwide, but if you start looking into Europe, there’s always a VAT—a value-added tax—that’s required. So if you have the option of buying a precious metal, and gold has no value-added tax and silver has one, you’ve got to see silver rise by 17% for you to break even. It dissuades a lot of people from wanting to buy silver even though they might feel it’s just more upside potential. They can’t overcome or don’t want to overcome that huge premium that’s dictated by their jurisdiction to buy silver. So you don’t see much silver investment throughout Europe. You see very little in Asia. You see India as I mentioned, of course, and some in Japan. They’re mostly more gold than platinum as investment.

So, if you had a level playing field and there was no value-added tax and it was available because a lot of places like New Zealand, Australia has a pretty good silver market, but if you go into Europe, there really isn’t that robust a silver market. But now with the internet, I have to be clear here, it’s grown a great deal because you can buy over the internet in a jurisdiction different than you are living in and, in some cases, circumvent the VAT legally. So I want to paint a fair picture here so I’ve kind of gone from what it used to be like let’s say in the 2000s to where we are in 2017 where it’s actually become easier and easier regardless of what jurisdiction you are to purchase silver for investment purposes. So I want to be very clear on that.

Maurice: Yeah, that’s a very accurate statement, you know. My family on my mother’s side is from Germany. They reside in Germany and one of the reasons why they refused to purchase precious metals was the VAT. That’s exactly why. So you hit the nail right on top of the head there. You know, in a free market, supply and demand should provide us with a relatively accurate price. Are you convinced that silver should be at a spot price around $17.50 right now?

David: No. I think, you know, I had to tip my hat or to shout out which is the common vernacular to, you know, Steve St. Angelo, SRSrocco, I mean. He’s done a great deal of work showing that for whatever reason, gold and silver seem to have price basically just above the cost of production and, of course, there’s this runaway markets that happen occasionally and then they kind of wrung in. But there’s not a free market price relative to the physical commodity. It’s a market price determined on basically what the paper paradigm produces out of the commodities exchanges and the London bullion market and these are paper trades that satisfy the market for the most part.

If you look at the CME on a statistical basis relative to any commodity, it could be corn, it could be wheat, it could be silver. There’s really about 1% of that actual commodity that floats from the exchange out into the marketplace. Most of the commodities now are direct shift. In other words, there is an offtake agreement between a particular mine and a smelter/refiner that goes directly to, say, Apple or Mitsubishi or somebody else that needs the product for manufacturing purposes and that’s what takes place. So, although all these paper machinations set the price, the actual flow doesn’t go through the commodities exchange.

Maurice: Exactly. You know, David, how about this comparison here. So we have a spot price of $17.50. Let’s compare that with the debt clock, you know, it compares the dollar to silver which I actually believe we should read Federal Reserve note versus silver. And it has a different valuation, it’s not $17.50. I believe it’s over $800 right now, is that correct?

David: It is.

Maurice: So, let’s compare and contrast that. Where did they derive that price?

David: That’s the amount of dollars produced or currency I should say produced versus the amount of silver produced. So, it shows you if you valued silver, it’s a very simple promise. Amount of dollars out there versus the amount of gold produced and it comes out with a price and that’s what we’ll pay for gold, it would be about $7000. So that’s the amount of gold produced versus the amount of dollars produced. And then if you do it on the silver side, it’s the amount of dollars currency produced versus the amount of silver produced. So it shows you that the ratio, there is about 9:1.So it’s just pretty much in line with what we know from geology, what the ratio of silver and gold are coming out of the ground.

Maurice: You know, I want to just add one more point here to this. I’m not as concerned about the, I guess, the technicals of silver because in my opinion, if you found a sunken vessel that has a billion, you know, ounces of silver and you added that new inventory in, it still doesn’t make it for all the Federal Reserve notes that have been printed and our continuing to be printed. And that’s just my little 2 cents on that.

David: Well, I’d like to add a 2 cents because if you look at all financial assets, X real estates. We’re not talking about real estate whatsoever. We’re just talking about stocks and bonds, ETFs, all that type of thing you can see on any exchange. The amount of physical gold represents 1% of all financial assets, but the amount of silver is 2 cents. It’s 0.02%. So that shows you how extremely tie-in the silver market truly is on an investment basis. And this is really something that can work both ways, you know, the double-edged sword. If we woke up another 0.02% of that money that’s floating around wanting to invest in the silver market, think of where that would take the price.

Maurice: Absolutely. You know, and if I’m not mistaken, so you also have financial instruments. What is it? Gold versus silver is almost a 1:1 ratio but silver 60 times less expensive? So you’re looking at a—I’m sorry, go ahead.

David: 70 currently. Go ahead.

Maurice: 70, yes. So if you look at that value proposition again, it’s screaming at listeners right now. Silver is the—of all the 4 precious metals and I love them all, silver to me has the absolute best value proposition. It’s right here before us, ladies and gentlemen. David, in reference to price, let’s discuss how the silver price is derived.

David: Well, there’s really 2 ways. The primary one you can talk about, you know, what’s done with the London silver benchmark that’s done through the London Bullion Market Association. That’s one way. You can Google it and read about it. Another way is primarily what’s done which is the CME Chicago Mercantile Exchange and this is used to be an open-out system with hand signals and all that. For the most part, that’s all gone away throughout the commodity sector. Almost everything is what’s called off-floor trading which is all done by computer algorithms and these algorithms swap numbers back and forth and determine the price. And then there is ways to mitigate, let’s say, what might be determined by physical supply because if you were only able to trade what was physically held and exchanged, then there wouldn’t be nearly as much participation, when we spit it out in plain English.

Basically, even though there are rules against it, the commodities exchange allows as much paper silver to be produced as anyone wants. So basically there’s an infinite supply of paper silver which as long as the market accepts that, you can have a great—huge supply. I mean, you know, anything that’s of value is based on—supposedly based on supply and demand. So, if you had an infinite supply of paper clips, you know, would you ever be able to sell one at a store? No. You know, you just walk down the street and pick them off the ground, so to speak. I’m using this as an analogy.

And so, that’s the situation in silver market, more so than any other commodity. I mean there’s a cover ratio which means how many days or months are there of paper silver, paper gold, paper wheat, whatever on the exchange versus the actual demand then you’ll find that silver has an extreme case, more so than any other commodity, which is very interesting when you analyze it.

Maurice: You know, I want to add on to that if I may, David, you know. And if I’m going off the deep end here, catch me so I don’t sink here. But for listeners, you can draw your own conclusions here. So you have the working group on financial markets. Please look that up. That’s the working group on financial markets. They’re also known as the plunge protectionteam. Now, I believe silver is manipulated, but I also want to be fair and say that I believe all markets are manipulated. I want to be very clear on that.

I believe they created these derivative products such as SLV to manipulate the price of silver. And I’m not aware of any and if there are, there aren’t many, pension funds that hold SLV. So, what that really means is if you look at a—in banking terms, you have demand deposits and time deposits, just like a qualified funds and non-qualified funds. So, as a banker, it’s really dangerous when he can go and take your checking account balance and use fractional reserve banking and this is what you really have with SLV. They’re supposed to have X amount of silver. Here they’re taking non-qualified funds, demand deposits. They’re exponentially creating them so it makes it seem like there’s an abundance of silver where the ratio technically should be 1:1 because if—does the SLV—it trades very similar to the spot price, does it not?

David: It does.

Maurice: So—but the ratio really is 100 shares to 1 ounce of silver if I’m not mistaken. Is that correct as well?

David: Yes. And there’s a little offtake based on, you know, money to run the fund but, yeah, that’s the general idea. Correct.

Maurice: You know, this is very, very dangerous and it’s very pernicious and a lot of investors, I know they seek refuge in SLV, but we want to make sure that you focus on facts. First of all, when you purchase SLV, you’re using currency to purchase the shares and you get back currency because you cannot redeem SLV in the physical form. So, we want to make sure we’re very clear on that. David, what are the catalysts here that will take silver to its true market price?

David: Well, it would be investment demand. I mean unless there’s some huge new industrial breakthrough technology that requires silver, like let’s just make one up, that’s feasible like an electrical generating system that you could buy for a thousand dollars that would supply your apartment with electricity forever. Something along those lines. There could be. I don’t want to rule it out that there’d be some technological breakthrough that will put a huge demand on the silver supply.

The reason I said that is because, you know, I’m familiar with Clif High’s work at the Web Bot project, the ALTA reports and I do read them and he has—according—I won’t say he. The Web Bot or the ALTA reports have come back and stated a not that specific example just that there’d be—I think it was new electrics or—I just want to cover myself today. I hate to speak for someone else and be inaccurate, but there could be a demand in the future for silver that will take it very, very high because it’s such a technological need by everybody that the market would overwhelm the miniscule supply that exists.

Having said that, my belief until that’s proven, is that it’s monetary demand. It’s protection from what’s happened to all fiat currencies over time. And if you could see—if you looked at silver still be monetized, in other words, it wasn’t for the fact of the crime of 1873 where silver was demonetized, and you look at what the bank reserves are worldwide for bullion banks, commercial banks, the IMF, the bank of international settlements at all that hold gold even though they don’t talk about it and they’ve been that buyer for quite some time even though they poo-poo it all the time. If you look at what they’re doing and not what they’re saying, just think of silver had to be held as a monetary reserve. What do you think the price would be then?

Maurice: Absolutely. You know, David, we’ve covered a lot of ground here today. Last question for you, what did I forget to ask?

David: Oh, nothing, just a couple things I like to say is when I started a podcast and we appreciate anyone that passes that fact on. If you go to the iTunes store and type in “The Morgan Report,” you’ll be able to subscribe to the podcast that I do on a weekly basis. I’ve been trying for the last few months to do a weekly wrap-up but keep it under 10 minutes. I try to hit the most important financial news of the week and ones that you would consider to be, you know, is real news but might be considered by the mainstream as fake news. It’s not I can verify at all. And then I usually finish off with what’s the highlight from my perspective in gold and silver. So that’s something I’m going to try to continue with no matter where I am in the world because, you know, with the smartphone technology, I can be exhausted in a hotel room in Hong Kong and still squeeze out 10 minutes of important information for the podcast.

Other than that, the best place to get a free report on the resource sector because The Morgan Report does a lot more than silver and there’s lots of opportunities not only in gold but there’s cobalt, lithium. There’s lots out there in what we call the electronic storage space which is battery technology and that was covered a few months ago in The Morgan Report. We continue to look for opportunities. We did an outline. It was time-consuming last month on 19 primary silver producers and outlined them in better than a Wall Street format as far as all-in-sustaining cost, life of the mine, secondary reserves. I mean this was a really in-depth study. I mean if I was on Wall Street on this thing, it would be, you know, $50,000 a copy. I’m not and I don’t care it to be. But I mean that’s the quality. I’m trying to get over the quality and, of course, the value is whatever the value is to you. In other words, people that care about silver mining in a great deal would cherish it and people that really don’t give a hoot and are looking for the next pending stock flyer and all that, but it’s probably not that valuable to them.

So I think I spoke enough about The Morgan Report. We’re certainly always happy to have free subscribes, so just go to themorganreport.com. Give us a first name and a primary email address. Verify it’s you and you will get on the free list.

Maurice: David, we’ve referenced The Silver Manifesto. Where can we get a copy?

David: Amazon is the best place, the easiest. If you’re Canadian, unfortunately, I’ll have to mail it to you and if you go to thesilvermanifesto.com, there’s a whole chapter in there on silver manipulation. There’s also fractional reserve bullion banking so you can understand a little deeper on what we discussed on the silver manipulation and why there’s all this “additional silver” that exists in the paper realm but not in the actual physical reality.

And one more thing I forgot to say about the CME, the one you asked me, and that is the exchange basically allows the banks to create as much paper silver they want. But the other side is the physical reality. So when you want to take silver off there exchange, there’s a limit to it. So, the shorts can make up as much silver as they want, but the law—excuse me—but the people who actually take the physical—in other words, the long it takes delivery, that’s a limit and you can’t do more than 1500 contracts. So, it’s interesting that they have the game, you know, pretty much rigged any way you want to.

Another fact that GATA jumped on years ago but I had it way before them not that it’s—it’s just knowing the fact, is all. But when you are a commercial interest, you have a 30% discount on your dollar. In other words, what I have to put up as a speculator at $1, they get to sell it for 70 cents. So they get an advantage of how much margin they’re required to put up on a contract versus what I would have to put up. They get a 30% advantage and they can create as much as they want out of thin air and they can create their money out of thin air. So, who’s got the advantage on the commodities exchange?

Maurice: Now, this is vital information. Again, we’re most appreciative. For our listeners here today, I just want to share with you, we are subscribers to David’s podcast show. Also, we encourage you, highly encourage you, to purchase The Silver Manifesto. This is a must-have book. If you’re going to be in the natural resource space, specifically precious metals, this is more as your bible.

And last but not least, please visit our website, www.provenandprobable.com. Through Miles Franklin Precious Metals Investments, we offer gold, silver, platinum and palladium offshore storage accounts, precious metals IRAs and safe deposit boxes which are fully insured and secured by Brinks. The website again is www.provenandproven.com. You may reach us at contact@provenandprobable.com. David Morgan of The Morgan Report, thank you for joining us today on Proven & Probable.

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